Sunday, December 25, 2011
Ron Paul has a good chance to win the Iowa caucuses according to Nate Silver. But he isn't likely to be able to build on that relatively strong showing in Iowa. His support is quite strong, but very narrow. Nate estimates that at the very best Ron Paul might be able to get about one-third of the Republican votes.
Nate bases his opinion on a series of polls. But his analysis comes from before the Republican establishment really started going after Ron Paul because he was beginning to appear to be a real threat to Romney. The growing chorus quoting Ron Paul's racist writings in his 1980's and 1990's news letters will lower these numbers. So will wider distribution of his views regarding pulling American troops back to the American shores and entering a new period of American isolationism.
Ron Paul's fervant supporters will keep him in the Republican nomination process until it ends, but I think Nate Silver's estimate as high as one-third of Republican voters is highly optomistic.
The next candidate to look at is Newt Gingrich. Newt's disorganization has jumped up to bite him big time. He has failed to qualify for the Virginia Primary which is to be held on Super Tuesday March 6, 2012. His campaign needed signatures from 10,000 registered voters, including 400 from each of the states 11 Congressional Districts. The Newt campaign could not organize itself well enough to achieve a relatively small admininstrative requirement by the deadline. This failure demonstrates what most observers already recognize - Newt is horribly disorganized.
It will be interesting to see if Newt's secretive backers and their Super Pacs who have funded Newt's recent rise from obscurity to being considered a viable candidate forthe Republican nomination as an alternate to Romney will continue throught the Spring.
Rick Perry, the only other non-Romney candidate likely to be able to compete into the Spring, also failed to qualify for the Virginia primary. Like Newt, Rick Perry has had the appearance of being a well-funded alternative to Mitt Romney. His series of gaffes in the debates have clearly demonstrated that he is not Presidential quality, but his deep-pocketed funders in Texas have been willing to shell out the money for the primary season anyway. I'm not sure what his funders thought they were going to buy, but it's pretty sure Rick Perry will never deliver to them. America as a whole is the winner here.
Given the weaknesses of Romney's three major opponents and the fact that the Republican establishment is circling the wagons in support of Mitt it looks like Mitt Romney will, as previously expected, be the Republican nominee for President.
Is there a chance this line up will change this spring? There's always a chance, but that chance is getting smaller and smaller. Without the Virginia votes on Super Tuesday Gingrich and Perry are very unlikely to be able to effectively challenge Romney. Ron Paul will never get over 35% of the Republicans and I'll be surprised if he gets 20%. The more Paul moves to become a real challenger the more the fact that he is utterly insane will become clear even to the Republican voters. The field of candidates really has winnowed down that tightly.
Both the tea partiers and the evangelical Republicans are going to make a lot of noise objecting to Romney, but as spring moves forward their hatred of Obama and the hope that Romney can defeat him will damp down that noise. As much as the evangelicals dislike Romney's Mormon religion, they hate Obama and the Democrats worse. They will hold their collective noses and prepare to vote for Romney in November.
The media is going to hate this. Where is the conflict that drives ratings and advertising? No drama Obama isn't going to give it to them, and while Romney will try to lure the media in he doesn't have much to offer them until after the Republican convention in August. That leaves the media in about a six months long silly season from Super Tuesday until the conventions. Then it will be Obama vs Romney - just as has been clear since last summer.
Sunday, December 18, 2011
I have to give Gingrich credit for choosing a detested target which has weakened itself politically during the 21st Century.
The US Supreme Court (SC) has really worked very hard to destroy its' own political legitimacy, especially with their unjustified and clearly illegitimate appointment of Bush as President in 2000 as well as their judicial overreach going far beyond the issues in the case they had decided to accept in the declaration that corporations are people in Citizens United.
Beyond their unjudicial and biased decisions there is also the refusal of the Justices to Clarence Thomas' and Scalia's unethical behavior. Their refusal to act within judicial ethics rules also has weakened the Supreme Court's legitimacy. Most of America - progressive and conservative both - no longer consider the declarations of the nine justices anything more than just the pronouncements of another bunch of cheap politicians. Gingrich
Gingrich, as one of America's most notorious cheap politicians, has recognized all this self-inflicted weakness in the Supreme Court and has stepped in to take advantage of that fact. He is attacking the Supreme Court, and through it the entire American judicial system. Trust a nasty cheap politician like Gingrich to use the self-inflicted weakness of others to try to advance himself.
Unfortunately for Gingrich it won't help him. He simply displays his own lack of character as he attacks the Supreme Court. He offers no analysis or correction to the court. All he is doing is showing off his own (imagined) intelligence as well has his own inability to function effectively in government.
Friday, December 16, 2011
Mr. Paul identifies himself as a believer in “Austrian” economics — a doctrine that it goes without saying rejects John Maynard Keynes but is almost equally vehement in rejecting the ideas of Milton Friedman. For Austrians see “fiat money,” money that is just printed without being backed by gold, as the root of all economic evil, which means that they fiercely oppose the kind of monetary expansion Friedman claimed could have prevented the Great Depression — and which was actually carried out by Ben Bernanke this time around.So the inflation that Austrian Economics predicts has not happened. Why not?
O.K., a brief digression: the Federal Reserve doesn’t actually print money (the Treasury does that). But the Fed does control the “monetary base,” the sum of bank reserves and currency in circulation. So when people talk about Mr. Bernanke printing money, what they really mean is that the Fed expanded the monetary base.
And there has, indeed, been a huge expansion of the monetary base. After Lehman Brothers fell, the Fed began lending large sums to banks as well as buying a wide range of other assets, in a (successful) attempt to stabilize financial markets, in the process adding large amounts to bank reserves. In the fall of 2010, the Fed began another round of purchases, in a less successful attempt to boost economic growth. The combined effect of these actions was that the monetary base more than tripled in size.
Austrians, and for that matter many right-leaning economists, were sure about what would happen as a result: There would be devastating inflation. One popular Austrian commentator who has advised Mr. Paul, Peter Schiff, even warned (on Glenn Beck’s TV show) of the possibility of Zimbabwe-style hyperinflation in the near future.
So here we are, three years later. How’s it going? Inflation has fluctuated, but, at the end of the day, consumer prices have risen just 4.5 percent, meaning an average annual inflation rate of only 1.5 percent. Who could have predicted that printing so much money would cause so little inflation? Well, I could. And did. And so did others who understood the Keynesian economics Mr. Paul reviles. But Mr. Paul’s supporters continue to claim, somehow, that he has been right about everything.
Because the world is in a massive recession. By definition that means there are unused capital goods and workers who cannot find jobs. Inflation occurs when too much money chases too few jobs in the market.
In that case the excess money has to compete with others who have money to buy capital goods. The competition drives the prices up - meaning competition for capital goods by people who need them and have money causes the price to rise. But prices are not rising. Why?
Because no one has any use for the unused capital goods. The problem is not excess money. The problem is insufficient demand. That means there is not enough consumption to drive businesses to obtain capital goods in the market. Generally they simply use what they have already. They also do not hire more workers, and since workers create 70% of all consumption, demand is not increasing. Without anticipated consumption to drive it, businesses will not invest in more capital goods and will not hire more workers.
Austrian Economics fails again. Ron Paul is, like most of the GOP leaders today, living in a fantasy world of his own making. The Austrian Economics/Libertarian fantasy is being pushed by wealthy individuals like to Koch Brothers through the CATO Institute primarily to weaken the power of the government over corporations, banks, and yes, wealthy families who would prefer to live in a plutocracy where they call all the shots.
Gov. Nikki Haley dictated the conclusions of a committee charged with deciding how the state should implement federal health care reform before the group ever held its first meeting, public documents show.In short, Nikki Haley does not want a competitive market in health insurance. She is governor of Virginia in part to ensure that Virginians have to buy health insurance from an oligopoly that already exists and wants no competition.
Now, some of those involved in the dozens of meetings are calling the entire planning process a sham that wasted their time and part of a $1 million federal grant.
In a March 31 email thread that included Haley, her top advisers and the committee member who eventually wrote the report, Haley wrote, "The whole point of this commission should be to figure out how to opt out and how to avoid a federal takeover, NOT create a state exchange," which is eventually what happened.
A central part of the federal health care overhaul, an exchange is a marketplace where various insurance plans eventually will be sold.
The most recent progress reports filed with the federal government show the administration used about $109,000 of the $1 million grant through the end of November.
Crangle said the exercise was "not in good faith" and called it "an abuse of federal funds." State money also is at issue because state employees were on state time when they attended dozens of exchange planning meetings, he said.
Sue Berkowitz, an advocate for the uninsured who participated in planning discussions as executive director of S.C. Appleseed Legal Justice Center, said time was wasted.
"We came together and sat down for a lot of meetings in good faith that we'd explore every option and discuss what is in the best interests of the state," she said. "I'm frustrated that we were being used for something that wasn't an open, transparent discussion."
Insurance exchanges are the state- or federally-run marketplaces where health coverage will be sold to individuals and small business employees beginning in 2014. They are a key part of the federal health law.
Envisioned as the "Expedia" for health insurance, exchanges are intended to make purchasing health care easier and more affordable by allowing customers to compare options side-by-side.
They also are intended to be the place where residents who make between 133 percent and 400 percent of the poverty level will apply for and collect federal tax credits to buy coverage.
A state panel established by Gov. Nikki Haley recommended last month the state should not manage its own exchange. If Haley accepts the recommendations, South Carolina will join a handful of other states that already have declined to set up exchanges.
States that do not set up exchanges by 2014 will be subject to federally run exchanges.
Wednesday, December 14, 2011
Ezra Klein:There are two very different tax-policy conversations playing out in the Republican Party right now. In Washington, House Republicans are arguing with each other over how small of a temporary tax cut to give the middle class. Out on the primary trail, the Republican presidential candidates are arguing over how huge of a permanent tax cut to give the wealthy.But it’s not odd at all, once you realize that the GOP is not now, and never has been (at least not since the 1970s) concerned about the deficit. All the fiscal posturing of the last couple of years has been about using the deficit as a club to smash the welfare state, with the secondary goal of frustrating any efforts on the part of the Obama administration to help the struggling economy.
All of which leaves the Republican Party in an odd place: skeptical of a temporary tax cut for the middle class that carries a price tag in the low hundreds of billions of dollars and is fully paid for but apparently enthused over permanent tax cuts for the rich that cost trillions of dollars and aren’t paid for at all.
The entire debate has been fake. If you don’t understand that, or can’t bring yourself to admit it, you’re missing the whole story.
Monday, December 12, 2011
Wall Street’s shenanigans have convinced a large portion of America that the economic game is rigged.Wall Street has shown clearly that they cannot be trusted, but when someone tries to enforce regulations on them what do they do? They whine about how misunderstood they are. They are not misunderstood. They are the organized center of financial greed and immorality in the world.
Yet capitalism depends on trust. Without trust, people avoid even sensible economic risks. They also begin trading in gray markets and black markets. They think that if the big guys cheat in big ways, they might as well begin cheating in small ways. And when they think the game is rigged, they’re easy prey for political demagogues with fast tongues and dumb ideas.
Tally up these costs and it’s a whopper.
Wall Street has blanketed America in a miasma of cynicism. Most Americans assume the reason the Street got its taxpayer-funded bailout without strings in the first place was because of its political clout. That must be why the banks didn’t have to renegotiate the mortgages of Americans – many of whom, because of the economic collapse brought on by the Street’s excesses, are still under water. Some are drowning.
That must be why taxpayers didn’t get equity stakes in the banks we bailed out – as Warren Buffet got when he bailed out Goldman Sachs. That means when the banks became profitable gain we didn’t get any of the upside gains; we just padded the Street’s downside risks.
The Street’s political clout must be why most top Wall Street executives who were bailed out by taxpayers still have their jobs, have still avoided prosecution, are still making vast fortunes – while tens of millions of average Americans continue to lose their jobs, their wages, their medical coverage, or their homes.
And why the Dodd-Frank bill was filled with loopholes big enough for Wall Street executives and traders to drive their ferrari’s through.
The cost of such cynicism has leeched deep into America, causing so much suspicion and anger that our politics has become a cauldron of rage. It’s found expression in Tea Partiers and Occupiers, and millions of others who think the people at the top have sold us out.
Wall Street Bankers are responsible for the current economic problems because they created and sold “financial weapons of mass destruction.” They bought off the regulators with their K-Street lobbyists, and they have supported the libertarian conservative Republicans who have thwarted and stopped government regulation of bank trading and mergers.
Since the (bank-created) collapse of the Savings and Loan institutions in the 1980's commercial banks have been merging until there are now only about five really massive banks. These banks do not do much business with small businesses because such loans do not provide large profits. They instead compete with the financial trading banks like Goldman Sachs for trading profits, using the savings from commercial customers as the basis for their trades. Why not? It's a lot cheaper than borrowing money in the market, isn't it?
But along the way the banks have forgotten that people have to trust them to do business with them. If we express our lack of trust in the massive banks who don't give a shit what happens to us, then we become their enemy. Their enemies are people that the government they buy (see K-Street Lobbyists) is supposed to suppress. The bankers prefer to wield power rather than work to develop trust.
Bob Reich has the banker's number. The bankers have forgotten that they are not in the power business, they are in the trust business. And a lot of us have been burned and no longer trust them.
Smart bankers will push for stronger and more visible regulation. I doubt that there are very many smart bankers on Wall Street in positions of power within the banking structures.
It’s time to start calling the current situation what it is: a depression. True, it’s not a full replay of the Great Depression, but that’s cold comfort. Unemployment in both America and Europe remains disastrously high. Leaders and institutions are increasingly discredited. And democratic values are under siege.The results of this is a discreditation of democracy in Europe and a rise in the popularity of authoritarianism. Krugman describe several European examples, of which the following is one.
[In poorly understood Europe] The shared currency, which was supposed to bind nations together, has instead created an atmosphere of bitter acrimony.
Specifically, demands for ever-harsher austerity, with no offsetting effort to foster growth, have done double damage. They have failed as economic policy, worsening unemployment without restoring confidence; a Europe-wide recession now looks likely even if the immediate threat of financial crisis is contained. And they have created immense anger, with many Europeans furious at what is perceived, fairly or unfairly (or actually a bit of both), as a heavy-handed exercise of German power.
Right-wing populists are on the rise from Austria, where the Freedom Party (whose leader used to have neo-Nazi connections) runs neck-and-neck in the polls with established parties, to Finland, where the anti-immigrant True Finns party had a strong electoral showing last April. And these are rich countries whose economies have held up fairly well. Matters look even more ominous in the poorer nations of Central and Eastern Europe.Essentially what has happened is that the bank-created economic disaster has destroyed the lives of a large number of Europeans and they want to know who to blame. But the banks are in charge of solving the economic problems, so they are demanding austerity solutions.
Austerity does not end a Depression. It never has and it never will. So things are getting worse as austerity is imposed by bank-advised governments.
As things get worse, the governments are being blamed. They are imposing the austerity, after all. Since the governments are failing, obviously they need to be changed. There are people out there saying "Give me control and I will fix the economy!" But they can't get control in the existing democracies. So the problem will be solved by eliminating democracy and putting those who promise solutions into control of government.
Welcome to authoritarianism! Will the new authoritarians when installed stop listening to the bankers who are demanding austerity "solutions"? Yeah, for a while anyway. But authoritarianism brings its own set of new problems with it.
This is a bit different from the set of economic problems here in America. Here we have a minority political party with discredited solutions to the very economic problems they themselves created who are using provisions of the Constitution to paralyze government in the face of those very problems that minority party created. The purpose of paralyzing the government is to force the American public to return the failed minority to power because they will not permit the government to act to solve problems while they are out of power.
The link between European problems and American problems is that the very banks which created the economic problems both national entities face are demanding that the governments install socially destructive and economically ineffective austerity "solutions" to fix the economic problems the banks created. The so-called solutions will actually do nothing more than shift wealth From the middle and working classes who create the wealth to the financial predators who make up much of the top 1% of the economic classes in both America and Europe.
If the bankers have to install authoritarian governments to get their way, they will not hesitate to do so.
Krugman's right. The problem has moved far beyond just a really severe recession. Both America and Europe are now in the early stages of another Depression, one which combines economic hardship with very strong threats to democracy.
Sunday, December 11, 2011
Saturday, October 29, 2011
Chris discusses this with his guests Heather McGhee (Demos.org) and Ta-Nehisi Coates (TheAtlantic.com) in the first ten minutes of the first segment of his Satarday show.
This is the second hour of the same discussion.
Wednesday, October 26, 2011
Here Rachel Maddow interviews Glenn Greenwald about his new book "With Liberty and Justice for
As Francis Fukuyama makes very clear in his new book The Origins of Political Order one of the key elements of modern states and nations is the legitimacy that is provided by the assurance that the Rule of Law applies to everyone, not just to the peons. Today the Occupy Wall Street movement is at its core a reaction to the belief that there is one set of laws for the 99% and another for the top 1%.
The core element of legitimacy of the American government has been the belief that the rule of law has applied to Americans. The fact is the financial collapse of 2008 and the lack of any investigation into the collapse and application of blame to the clearly guilty has made it clear that neither the American elites nor the American government actually operate under the rule of law any more. This may well be the most significant reason for the poor ratings currently given to Congress.
Unless the rule of law is brought back and the parties who caused the collapse of the economy are investigated and punished there is a strong likelihood that no party is going to be able to regain and keep control of the American federal government for any period of time. Blame and punishment is going to be more important to the survival of American institutions than the false stability provided by ignoring wrong-doing.
It should also be very clear that the conservative movement and the wealthy elites who created and funded it are directly responsible for the collapse of the American economy.
Addendum 5:04 PM CST
Check out this article on Rule of Law.
This media-stoked deal of bipartisanship is a ridiculous fiction, of course. It has no basis in reality. But then the media itself has almost no basis in reality any more. Now Ed Kilgore, James Vega, and J. P. Green describe America's current political reality:
The most dangerous group of political extremists today is not the grass roots supporters of the Tea Party. It is the major sector of the Republican financial and ideological elite who have embraced the philosophy of “politics as warfare.”There is more in this very clear analysis of the collapse of American democratic politics.
Extremist political parties share a large number of common characteristics, one critical trait being a radically different conception of the role and purpose of the political party itself in a democratic society.
In the politics as warfare perspective a political party’s objective is defined as the conquest and seizure of power and not sincere collaboration in democratic governance. The party is viewed as a combat organization whose goal is to defeat an enemy, not a governing organization whose job is to faithfully represent the people who voted for it. Political debate and legislative maneuvering are seen not as the means to achieve ultimate compromise, but as forms of combat whose objective is total victory.
This basic conception of the role of political parties leads to the justification and use of two profoundly anti-democratic strategies.
First, in the politics as warfare perspective it is a legitimate strategy for a political party to paralyze the workings of government in order to prevent a democratically elected government of an opposing party from implementing the platform on which it was elected. In the politics as warfare perspective the extremist political party accepts no responsibility for stability—engineering the failure of the existing government is absolutely paramount and any negative consequences that may occur in the process represent a kind of “collateral damage” that must be accepted as inevitable in warfare.
Historically, the Republican Party never embraced this strategy at any time during the Democratic administrations of Truman, Kennedy or Carter. The strategy first made its appearance when Newt Gingrich engineered the shutdown of the government in 1994. After Obama’s election in 2008 the use of this “paralyze the government” tactic accelerated dramatically with the conversion of the filibuster into a minority veto of virtually all majoritysponsored legislation and a Republican bar to the huge numbers of judicial and administrative appointments. Previous generations of Republicans would have been scandalized by the notion of crippling the administration of justice by leaving courts grotesquely understaffed in order to prevent the appointment of individuals who did not strictly adhere to conservative orthodoxy.
The most dramatic escalation of this approach, however, occurred after the elections of 2010 and was reflected in the rejection of the very substantial reduction in federal spending that Obama offered the Republican house majority. Observers concurred that the deal was far more favorable to conservatives in terms of policy than the deal Ronald Reagan accepted in 1986 on tax reform or that Newt Gingrich accepted on welfare reform in 1995. But public statements by Republican leaders indicated that the deal was rejected in substantial part on the explicitly political grounds that any legislative agreement that produced a “victory” for Obama was unacceptable. In effect, the political objective of weakening the president had actually become a higher priority than the achievement of the most fundamental long-sought conservative policy goals.
It is almost impossible for anyone who does not remember previous eras of American politics to realize how extraordinary this transformation actually is. It would have been literally inconceivable to the Republican senators and congressmen of the 1950s and 1960s.
The second, even more directly and profoundly anti-democratic strategy that directly flows from the politics as warfare philosophy is the calculated attempt to disenfranchise likely pro-Democratic voters.
There were no systematic Republican initiatives to disenfranchise voters during the Nixon, Reagan or Gingrich eras. But after the 2008 elections Fox News began promulgating the notion that massive voter fraud had occurred. Fox News featured a video of two members of the New Black Panthers at a single polling site more than 100 times on its national programs, asserting that they had intimidated voters in order to insure Obama’s election.
Even after it was conclusively demonstrated2 that sworn eyewitness testimony had been intentionally falsified in order to fabricate this charge, Fox continued to air the accusations and to assert that they were the tip of the iceberg of similar incidents. In parallel, accusations were also made that massive numbers of fraudulent votes had been cast in the election. The result of these charges was a widespread grass-roots effort by local tea party groups to police polling places and record incidents of intimidation and fraudulent voting during the 2010 elections—an effort that produced not a single documented case anywhere in the country. Nonetheless, there is now a major, nationally coordinated and massively funded effort to prevent pro-Democratic constituencies from casting their ballots. TDS managing editor Ed Kilgore accurately summarized the situation as follows: Central Eyewitness Testimony.
In the wake of the 2010 elections, Republican governors and legislatures are engaging in a wave of restrictive voting legislation unlike anything this country has seen since the Voting Rights Act of 1965, which signaled the defeat of the South’s long effort to prevent universal suffrage. This wave of activism is too universal to be a coincidence, and too broad to reflect anything other than a general determination to restrict the franchise. Millions of voters are affected….
As Ari Berman explained in an excellent recent summary of these developments for Rolling Stone, restrictive legislation, which has been introduced in 38 states and enacted (so far) in at least 12, can be divided into four main categories: restrictions on voter registration drives by nonpartisan, nonprofit civic and advocacy groups; cutbacks in early voting opportunities; new, burdensome identification requirements for voting; and reinstitution of bans on voting by ex-felons.
While new voter ID laws have clearly been coordinated by the powerful conservative state legislative lobbying network ALEC (American Legislative Exchange Council), other initiatives have spread almost virally. Virtually all of these restrictions demonstrably target segments of the electorate—the very poor, African-Americans and Hispanics, college students, and organizations trying to register all of the above—that tend to vote for Democrats.
In previous decades large sectors of the Republican elite would have been extremely uncomfortable with such measures and a significant group would have been vocally critical. Today, however, there is literally not a single significant figure in the Republican universe who is publicly objecting. The overwhelming influence of Fox News and talk radio have converted the notions that Obama represents a threat as massive as the rise of Hitler did in Germany, and that massive voter fraud is occurring all across the country, into passionately held urban legends that Republican elites no longer dare—or indeed
even wish—to challenge.
There are two profoundly disturbing conclusions that must be faced: First, the paralysis of government and the disenfranchisement of citizens are not “business as usual” for American conservatism. They are not attempts to prevent or reverse the enactment of particular policies and bills to which conservatives object but are rather strategies that strike at the most basic institutions and operations of representative democracy itself. To put it bluntly, they are not the policies of conservatives—they are strategies of political extremism.
Second, these strategies are not the products of a disreputable fringe of grass roots conservative activists, but have been designed, executed, endorsed and financed by a major sector of the Republican and conservative financial and ideological elite. The extraordinary fact that there is no major group or individual within the Republican coalition vocally objecting to these measures, as would have occurred in the past, offers the most profoundly disturbing evidence imaginable of the widespread tacit approval by the Republican elite.
It is my opinion that America has a new aristocracy - one I call the moneyed elite. It consists largely of extremely wealthy families who want their power and wealth to gain control of the federal government, along with the Wall Street banking elite who handle the money belonging to those wealthy elite, and the social group that provides top executives to the large American and multinational corporations. An especially important element of this is Newscorp because it is a multinational moneyed elite predator which, because of its multinational status can avoid much of the regulation that national governments attempt to apply to the moneyed elites.
The federal government has, since the Great Depression, regulated the moneyed elites and provided justice to the working and middle classes. It is this regulation that the moneyed elites wish to break. The takeover of the Republican Party by these elites and the application of the strategy of politics as warfare is their current effort to weaken the power of the federal government to control them.
Addendum 1:33 PM CST
Paul Krugman points to the extremism described above very, very clearly.
Progressives are atheistic socialists who want to impose Sharia law. Class warfare is evil; also, John Kerry is too rich. And so on.I think - perhaps just hope - that the Occupy Wall Street movement is the first real indication that the mass American population has begun to awaken to the threat that the American conservative movement as it is now structured poses to American democracy and to American values.
The key to understanding this, I’d suggest, is that movement conservatism has become a closed, inward-looking universe in which you get points not by sounding reasonable to uncommitted outsiders — although there are a few designated pundits who play that role professionally — but by outdoing your fellow movement members in zeal.
It’s sort of reminiscent of Stalinists going after Trotskyites in the old days: the Trotskyites were left deviationists, and also saboteurs working for the Nazis. Didn’t propagandists feel silly saying all that? Not at all: in their universe, extremism in defense of the larger truth was no vice, and you literally couldn’t go too far.
Many members of the commentariat don’t want to face up to the fact that this is what American politics has become; they cling to the notion that there are gentlemanly elder statesmen on the right who would come to the fore if only Obama said the right words. But the fact is that nobody on that side of the political spectrum wants to or can make deals with the Islamic atheist anti-military warmonger in the White House.
Strap yourself in; this is not going to be fun.
Thursday, October 20, 2011
(Reuters) - Secretary of State Hillary Clinton and top U.S. military and intelligence leaders delivered a tough warning to Pakistan on Thursday to cut suspected ties with militant groups which have upset relations between the uneasy allies.It's clear that Pakistan's cooperation is going to be necessary to resolve the US combat situation in Afghanistan, and the leaders of the ISI are aware of that. They are depending on that fact to keep the US from punishing Pakistan as a nation for the bad behavior of the ISI. The message from Secretary Clinton is clearly part of the process of ramping up the pressure on Pakistan.
Clinton led a heavyweight U.S. team at talks in Islamabad to
press Pakistani counterparts on U.S. accusations that Pakistan assists militants who launch attacks on both sides of the Afghan-Pakistan border and increasingly threaten U.S. interests.
"The meeting lasted for four hours. It was extremely frank, the discussion was very detailed," a senior U.S. official said after the meeting, adding that more discussions were planned for Friday.
The visit by Clinton, CIA director David Petraeus and the chairman of the Joint Chiefs of Staff, General Martin Dempsey, was a sign that Washington is determined to get its message across amid rising tensions among three key players in the Afghanistan war.
The meeting included Pakistani Prime Minister Yusuf Raza Gilani, the powerful army chief, General Ashfaq Kayani, and Lieutenant-General Ahmed Shuja Pasha, who heads the Inter-services Intelligence (ISI) agency which U.S. officials have singled out for its alleged support of militant groups.
Earlier on Thursday during a visit to Kabul, Clinton said it was time to send a "clear, unequivocal message" to Pakistan that it must step up efforts to broker an end to the decade-long war in Afghanistan and crack down on safe havens used by militants.
"They must be part of the solution and that means ridding their own country of terrorists who kill their own people and cross the border to kill in Afghanistan," Clinton said.
All we are seeing is what each side is willing to tell the media. The US may be ramping up the pressure, but Pakistan has both India and China sitting on its borders threatening it. With those two nations as immediate threats, the US is going to have to really ramp up the pressure to even be noticed. So I do not envy Secretary Clinton in delivering the message that the US has had enough. I'm glad she is doing it, though. It is necessary.
Washington (CNN) -- The Southern Plains of the United States are likely to see a continuation of a severe drought this winter, while the Pacific Northwest will be colder and wetter than average, according to data released Thursday by the National Oceanic and Atmospheric Administration.It looks like I need to replace my st. Augustine grass lawn with cactus or something similar. Oh, and reduce my steak-based meals since the price of beef will continue to climb.
La Nina is expected to influence weather patterns across the country for the second year in a row. Weather officials say with La Nina in place, Texas, Oklahoma, New Mexico and other surrounding states are unlikely to get enough rain to alleviate the ongoing drought.
"Ninety-one percent of Texas, 87 percent of Oklahoma and 63 percent of New Mexico are experiencing extreme or exceptional drought," said David Brown, director of the Southern Region Climate Services based in Fort Worth, Texas.
Parts of Texas and Oklahoma are more than 30 inches below average in rainfall this year, with little in the forecast to predict the trend is going to change as the winter months approach.
Note - this is a weather forecast, not a discussion of climate change. Weather is not climate.
Progressives must come to terms with the fact that the 35% or so of Americans who make up the conservative base have been radicalized far beyond the point of no return. They are activist class warriors on behalf of the top 1% of "producers." They are activist culture warriors against minority communities who will happily advance minority figureheads as exceptional standardbearers in order to prove their point.This is the "Two Tribes" Digby has been writing about for the last decade. I am going to write more about these two tribes in the near future but until I do, I strongly recommend Francis Fukuyama's new book The Origins of Political Order.
We are now a nation hopelessly divided. On one side is a large faction of people who understand that the financial classes and the super-wealthy are mostly a parasitic class; that the middle class has much more in common with the poor than it does with the wealthy; that workers produce wealth, and that demand produces prosperity; that poor communities are disadvantaged not by the inherent failings of their people but by the oppressive nature of their circumstances; and that we humans and creatures of this earth are all in the same boat together.
On the other side is a large group of people who believe that over half of Americans are parasitic dead weight who should not be allowed to vote; that the interests of the middle class are aligned with the interests of hedge fund managers; that only a select few very wealthy people produce society's goods; that poor communities are poor through their own moral failings; and that the society's "producers" should behave however they please to people and creatures unfortunate enough to find themselves at their mercy.
And in the middle are about 20% of Americans paying too little attention to have much of an opinion either way.
Fukuyama writes of the shift from tribal government to the national state. The national state is based on bureaucracy, which is an impersonal rational organizational structure of the type which is required to achieve control over large populations and especially to field large professional armies. Once a state exists, then history has shown it becomes unified when the king provides justice to the population and protects them from the predatory behavior of the aristocracy. But this protection only occurs in a strong state. A weak state cannot provide as much protection and cannot afford to field large professional armies over long periods of time.
Fukuyama describes the characteristics of tribally governed organizations and compares those characteristics of nation states which are based on bureaucracies. But he also points out that historically nation states have broken down, and when they do the default form of governance is tribal. The aristocrats prefer tribal governance because they are predators and such tribal governance allows them to plunder the population.
The aristocrats of France from three centuries ago are today's moneyed elites. Keep in mind that the working classes create value. The modern moneyed elites do nothing but collect rent without adding value to the society. Their rent is based on their positions of power, not on their economic value. Since the Great Depression the federal government has protected the working population of America from the predatory behavior of the moneyed elites, but with the rise of Reaganism that protection has broken down. Today Wall Street banks, large monopolistic or oligopolistic businesses and inherited wealth all conspire to weaken the federal government so that they can plunder the working population.
They are far along on their effort, but the Occupy Wall Street movement has begun to react to their predations. It's time for America to regain control over the financial predators who are attacking us.
I suppose it was inevitable that the burgeoning Occupy Wall Street movement would be compared with the Tea Party, but the level of misunderstanding and myth surrounding the latter's "populist" bona fides is surprising to even the most cynical observer.Click Here to read the rest.
There may be surface similarities between the two uprisings, but they actually represent two opposing populist worldviews, whose only philosophical resemblance to one another is their belief that they speak for "the people" against the elites. While both movements are mainly concerned with economic issues, their beliefs about the causes and solutions they propose couldn't be more different.
One of the central myths about the Tea Party is that it came about as a reaction against the Wall Street bailouts. It's true that there were some scattered "Tea Parties" around the Ron Paul campaign in 2008, but virtually everyone agrees that the movement was really galvanised by a famous rant from CNBC anchor Rick Santelli from the trading floor of the Chicago commodities exchange.
Only one month into the Obama administration, Santelli called for a "new Tea Party" to be held on tax day, April 15, and it became an instant YouTube sensation and rallying cry for the right wing.
He was mad about bailouts alright, but not the Wall Street bailouts. What sparked his fury was the proposed plan to help average homeowners in trouble with their mortgages. Santelli raved: "Do we really want to subsidise the losers' mortgages? This is America! How many of you people want to pay for your neighbour's mortgage? President Obama, are you listening? How about we all stop paying our mortgages! It's a moral hazard."
"Do we really want to subsidise the losers?"
- Rick Santelli, CNBC anchor
Here's how his colleague Lawrence Kudlow characterised the outburst: "Santelli called for a new Tea Party in support of capitalism. He's right."
Support for capitalism - and antipathy toward government interference in it - is the very essence of Tea Party populism. There wasn't much talk about the moral hazard of a "too big to fail" banking system but there was plenty of fulminating about government interference in "the market" and righteous anger about the stimulus plan and what they characterised as the "government takeover" of the healthcare system.
It was never about corporate greed, but was about the usual right wing resentment at the government spending their tax money on people they don't think have earned it. These are not billionaire bankers - they are the people on the lower rungs of the ladder. Unsurprisingly, this attitude turned out to be useful to corporate interests looking to allay any real populist impulses among the citizenry, and they soon moved in through various means to help the "movement" organise itself.
Contrary to various accounts surfacing lately ostensibly to warn the Occupy Wall Street supporters of the dangers of being similarly "co-opted" it was a very happy love match, not a marriage of convenience.
Occupy Wall Street, on the other hand, while being endlessly harrangued by wags and pundits about its alleged lack of goals and lists of grievances, is actually focused pretty clearly on the same thing as the populists of the Gilded Age - those whom Teddy Roosevelt called the "malefactors of great wealth".
Their rallying cry is "we are the 99 per cent" which represents the huge number of those of us who have been treading water or losing ground over the past 30 years, while and the upper one per cent of the population swallows up more and more of the nation's wealth. This shocking income inequality is finally reaching a critical mass that is animating the OWS movement.
Indifference of the rich
This movement wasn't catalysed by a wealthy commentator issuing a cri de guerre on a stock market show on TV. There has been a growing anti-corporate populist critique on the left for nearly 20 years, first in the form of the anti-globalisation movement and more recently in the more mainstream response to a series of assaults on workers' rights, notably in Wisconsin and Ohio.
The arrogant indifference of the very rich to the carnage they left behind in the wake of their spectacular meltdown in 2008, and the apparent impotence of democratic institutions to hold them to account, has finally mobilised the masses.
The experiment was tried. Women who were moved to better neighborhoods had significantly better health results, especially lower diabetes results and less extreme obesity. Why might that be?
the study was not designed to answer what it is about more affluent neighborhoods that would cause someone to be healthier. But the authors listed four theories:The results are not based on personal decisions. They are based on environment. That does not mean that personal decisions are not a factor in obesity and diabetes, just that environment is also an important factor.
_ The availability of healthier food is worse in lower-income neighborhoods.
_ Opportunities for physical exercise are scarcer, and fear of crime can make people afraid to jog or play in parks.
_ There may be fewer doctors' offices and other medical services.
_ The long-term stress of living in such an environment may alter the hormones that control weight.
Wednesday, October 19, 2011
This is the best quick explanation of what is wrong with modern retirement systems in America. We've been ripped off!
Tuesday, October 18, 2011
Do you think this skit bullies Rick Santorum? He does. Awww. Poor baby.
OK. This is from the Onion.
Man in Coma Enters GOP Race; Already Polling Ahead of Romney.
No news media tells the Truth quite as well at The Onion.
Monday, October 10, 2011
Compare the OWS demonstrators to the Tea Partiers; They each represent the elites fighting over Washington, D.C.
Then he explains how the two movements differ - the Tea Partiers are a strongly hierarchical movement which finds the elites it follows are out of power.
The Tea Party, for all its apparent populism, revolves around a vision of power and how to attain it. Tea Partiers tend to be white, male, Republican, graying, married and comfortable; the political system once worked for them, and they think it can be made to do so again. They revile government, but they adore hierarchy and order.The OWS individuals in contrast show:
Deep anger at grotesque inequities extends far beyond this one encampment; after all, a few handfuls of young activists do not have a monopoly on the fight against plutocracy. Revulsion in the face of a perverse economy is felt by many respectable people: unemployed, not yet unemployed, shakily employed and plain disgusted. A month from now, this movement, still busy being born, could look quite different.I like Gitlin's distinctions between the OWS demonstrators and the tea partiers. Both are angry at the disaster the elites have heaped on America and on most Americans. One major difference between the two groups, as Todd Gitlin points out, is that the OWS are anarchists and the tea partiers deeply love hierarchy and order (even to the point of approaching fascism though they will never admit that.)
And yet it remains true that the core of the movement, the (mostly young and white, skilled but jobless) people who started the “occupation” three weeks ago, consists of what right-wing critics call anarchists.
IN this recent incarnation, anarchism, for the most part, is not so much a theory of the absence of government, but a theory of self-organization, or direct democracy, as government. The idea is that you do not need institutions because the people, properly assembled, properly deliberating, even in one square block of Lower Manhattan, can regulate themselves.
This new protest style is more Rousseau than Marx. ... It likes government more than corporations, but its own style is hardly governmental. It tends to care about process more than results.
And oh, how it loves to talk. It is no surprise that it makes fervent use of the technologies of horizontal communication, of Facebook and Twitter, though the instinct predated — perhaps prefigured — those tools. Not coincidentally, this was also the spirit of the more or less leaderless, partyless revolutions of Tunisia and Egypt that are claimed as inspiration in Lower Manhattan. An “American Autumn” is their shot at an echo of the “Arab Spring.”
OCCUPY Wall Street, then, emanates from a culture — strictly speaking, a counterculture — that is diametrically opposed to Tea Party discipline. ... Such movements hope to remain forever under construction, fluid, unfixed. They slip laughingly through the nets of journalism, which prefers hard-and-fast answers to the question “What do you people want?”
[Can] ... the inchoate quality of the Occupy Wall Street movement ... continue[?] Probably not, since an evolving alliance demands concrete goals, strategies and compromises. But perhaps something of the initial free spirit can flourish. There is plenty of public sentiment to nourish it. It doesn’t take public opinion polls to detect American anger at the plutocracy and the impunity with which it lords it over the country.
The culture of anarchy is right about this: The corporate rich — those ostensible “job creators” who somehow haven’t gotten around to creating jobs — rule the Republican Party and much of the Democratic Party as well, having artfully arranged a mutual back-scratching society to enrich themselves. A refusal to compromise with this system, defined by its hierarchies of power and money, would be the current moment of anarchy’s great, lasting contribution.
Until now, fury at the plutocracy and the political class had found no channel to run in but the antigovernment fantasies of the Tea Party. Now it has dug a new channel. Anger does not move countries, but it moves movements — and movements, in turn, can move countries. To do that, movements need leverage. Even Archimedes needed a lever and a place to stand to move the world. When Zuccotti Park meets an aroused liberalism, the odd couple may not live happily ever after. But they can make a serious run at American dreams of “liberty and justice for all.”
But another major distinction Gitlin does not discuss is the distinction between the groups of elites the two groups each oppose and support. The OWS is an organization in opposition to the Wall Street elite bankers and to the wealthiest families in America who are trying to carve out tax exemptions and regulation exemptions for themselves at the expense of the rest of the people in the economy. Add the top executives of the largest oligopoly and monopoly firms in America who want the same exemptions from taxes and regulations and who also want to destroy all workers' institutions starting with unions.
The "elites" the tea partiers oppose appear to be governments in general when not Republican dominated, unions, Democratic and Socialist politicians, Secular Humanists/Atheists/Muslims/etc., and intellectuals of all types, particularly those who claim that Global Warming exists, is largely man-made and is getting worse. They are also angry at government which rejects their desire to carry firearms anywhere and any time they wish. To a great extent the elites the Tea Partiers support caused the Great Recession which all Americans (except the wealthy elites themselves) currently are suffering from.
Where there appears to be a strong anarchist element in OWS, there is clearly a strong Libertarian element mixed with a strong Christian religious fundamentalist element in the Tea Partiers. Both strongly oppose certain elites. But the elites each oppose are quite different.
It's the battle between those elites which is behind the current paralysis in Washington, D.C. The two different groups of elites are battling over control of government and much of the battle is now centering over the refusal of the conservatives (for whom the tea partiers are surrogates) to let government function at all if they cannot control it. The level of dysfunction has clearly reached the point where political professionals on both sides are speaking out.
The differences between the demonstrators in the Occupy Wall Street movement and the Tea Partiers mirror the competing factions currently paralysing Washington, D.C. and preventing the government from functioning.
The run-up to the 2012 election is going to get very interesting. We've seen nothing yet.
Saturday, October 08, 2011
Friday, October 07, 2011
What can we say about the protests? First things first: The protesters’ indictment of Wall Street as a destructive force, economically and politically, is completely right.[I have reformatted what Krugman wrote into bullet points but this remains an exact verbatim quote.]
A weary cynicism, a belief that justice will never get served, has taken over much of our political debate — and, yes, I myself have sometimes succumbed. In the process, it has been easy to forget just how outrageous the story of our economic woes really is. So, in case you’ve forgotten, it was a play in three acts.
There are a lot of people who are really angry/upset over the Wall Street Crisis of 2008 and its aftermath and who don't think anyone has done anything about it. That's the source of the nationwide anger at Wall Street and at the wealthy slackers who are refusing to do anything except exploit the less wealthy. The Occupy Wall Street demonstration is their expression, and it's beginning to have an effect.
Given this history, how can you not applaud the protesters for finally taking a stand?
- In the first act, bankers took advantage of deregulation to run wild (and pay themselves princely sums), inflating huge bubbles through reckless lending.
- In the second act, the bubbles burst — but bankers were bailed out by taxpayers, with remarkably few strings attached, even as ordinary workers continued to suffer the consequences of the bankers’ sins.
- And, in the third act, bankers showed their gratitude by turning on the people who had saved them, throwing their support — and the wealth they still possessed thanks to the bailouts — behind politicians who promised to keep their taxes low and dismantle the mild regulations erected in the aftermath of the crisis.
I, at least, am a lot more offended by the sight of exquisitely tailored plutocrats, who owe their continued wealth to government guarantees, whining that President Obama has said mean things about them than I am by the sight of ragtag young people denouncing consumerism.
Bear in mind, too, that experience has made it painfully clear that men in suits not only don’t have any monopoly on wisdom, they have very little wisdom to offer.
It would probably be helpful if protesters could agree on at least a few main policy changes they would like to see enacted. But we shouldn’t make too much of the lack of specifics. It’s clear what kinds of things the Occupy Wall Street demonstrators want, and it’s really the job of policy intellectuals and politicians to fill in the details.
Rich Yeselson, a veteran organizer and historian of social movements, has suggested that debt relief for working Americans become a central plank of the protests. I’ll second that, because such relief, in addition to serving economic justice, could do a lot to help the economy recover. I’d suggest that protesters also demand infrastructure investment — not more tax cuts — to help create jobs. Neither proposal is going to become law in the current political climate, but the whole point of the protests is to change that political climate.
And there are real political opportunities here. Not, of course, for today’s Republicans, who instinctively side with those Theodore Roosevelt-dubbed “malefactors of great wealth.” Mitt Romney, for example — who, by the way, probably pays less of his income in taxes than many middle-class Americans — was quick to condemn the protests as “class warfare.”
But Democrats are being given what amounts to a second chance. The Obama administration squandered a lot of potential good will early on by adopting banker-friendly policies that failed to deliver economic recovery even as bankers repaid the favor by turning on the president. Now, however, Mr. Obama’s party has a chance for a do-over. All it has to do is take these protests as seriously as they deserve to be taken.
Recent scandals involving Wall Street banks and financial institutions, headed by some of the world's most well-paid managers, executives and analysts, have many Americans asking themselves whether this game is rigged. It is this sense of injustice, coupled with economic insecurity, that animates changes in Americans' attitudes toward Wall Street. It's not just a small number of Americans, those who are actually "occupying" Wall Street, who feel such injustice. That's just the tip of the iceberg.It was perfectly obvious by 2009 to the public that the financial collapse that occurred in the fall of 2008 was the direct result of extreme and reckless risk-taking by Wall Street bankers. It soon became equally clear that those banks considered themselves too big to fail, so they had been free to take insane risks with other people's money. They would get the winnings and the American taxpayers would take the losses.
Americans have never exactly loved Wall Street stockbrokers or bankers—but we certainly didn't always hate them. Why this increasing hostility? The answer is a "perfect storm" of financial turmoil and a series of major scandals on Wall Street.
According to ... Harris Interactive, the percent of Americans with a great deal of confidence in the people running Wall Street had already reached an all-time low of just 4 percent by February of 2009. These figures are not just a reflection of Americans' dissatisfaction with the size of their bank accounts — they also reflect the increasing belief that Wall Street is playing a game that only the bankers can win.
Economic hard times, such as global recessions, do tend to bring about small, but noticeable drops in the public's confidence in Wall Street, just as we might expect falling confidence in a military that is losing a war.
But when economic downturns coincide with major scandals, as in the savings and loan crisis of the late 1980s and early 1990s and our current dilemma, the biggest changes in public confidence result — changes that may have contributed to the protests we are seeing on Wall Street today. In other words, Americans really begin to get angry when there is evidence of systematic foul play.
To be sure, material hardships such as unemployment rates in the 9 percent range and the continuing high levels of foreclosures and bankruptcies undoubtedly set the stage for a public outcry. But this outcry has a distinctly moral tenor. The sentiments of the Occupy protestors holding signs reading "Blame Wall Street Greed," "People not Profits" and "Wall Street was the Real Weapons of Mass Destruction" certainly echo the wider American public's sense of moral indignation.
Just 26 percent of Americans in an April 2011 Harris poll thought the people working on Wall Street were "as honest and moral as other people" (for a point of comparison, the percentage was 51 in 1997). In that same poll, 67 percent of Americans agreed that "most people on Wall Street would be willing to break the law if they believed they could make a lot of money and get away with it."
This was all clear to the Wall Street bankers long before the financial collapse they created. The accuracy of their beliefs became very clear when, after they were bailed out, not a single criminal case was brought against the criminal bankers who had created the disaster. Instead by 2010 their bonuses were reaching record levels never before seen, even as the world economy was struggling to dig out of the economic rubble those bankers left in their wake.
Is the "Occupy Wall Street" a social movement that expresses the anger of the rest of us who have watched those economic criminals commit their crimes and then skate without any retribution? No doubt. And if it is not effective then there will be another to follow until the Wall Street criminals pay for their crimes.
Wednesday, October 05, 2011
- the work of skilled organizers;
- the success of those organizers in getting people, once these events end, to meet over and over and over again;
- whether or not the movement can promote public policy solutions that are organically linked to the quotidian lives of its supporters; and
- the ability of liberalism’s infrastructure of intellectuals, writers, artists and professionals to expend an enormous amount of their cultural capital in support of the movement.
Friday, September 23, 2011
Wednesday, September 21, 2011
So the Republicans, with nothing else to run on for 2012, are in the process of sabotaging the economy. Is there any doubt? They are doing it in public now. They aren't even trying to hide their efforts.
- GOP leaders to Fed: Don’t act on economy: GOP leaders send a letter to the Fed chairman, urging him not to adopt any further stimulus to help the economy — on the grounds that more action could hurt it by weakening the dollar, even though many economists think a weakened dollar would be good for the country.
Ezra Klein sense a threat in the public pressure. Steve Benen suggests we’re seeing the latest sign of active GOP sabotage of the economy. And Matthew Yglesias says this should be the story of the day.
- Obama is tanking among independents: All that said, there’s no sugar-coating the fact that Obama’s overall numbers are terrible with indys. A new McClatchy-Marist poll finds that indys plan to vote against him by a whopping 53 to 28.
This could be a referendum on the current economy, and Obama’s challenge is to change this by somehow leveraging the fact that indys approve of the actual fiscal policies he’s currently championing. Hence the newly aggressive approach.
Well, apparently there is doubt among the independent voters. Remember that a major characteristic of "independent" voters is that they do not follow politics and have little in-depth information. They are probably reacting to the poor economy and blaming the President. Will they even hear of the letter from the Republican leadership to the Fed? If they do, will they understand what it means?
That reaction by the independent voters is exactly the one the Republican leadership is depending on.
This partial transcript comes from Steve Benen.
Warren, after explaining some of the reasons for the nation’s deep fiscal hole, pointed to a more sensible approach to economic policy in general. “I hear all this, you know, ‘Well, this is class warfare, this is whatever,’” she said. “No. There is nobody in this country who got rich on his own. Nobody.
“You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.
“Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”
Saturday, September 17, 2011
Kweku Adoboli is a 31 year-old british trader for the Swiss bank UBS. He was born in Ghana 15 Sept. 1980 and attended Ackworth School, a highly regarded Quaker school located in the village of High Ackworth near Pontefract, West Yorkshire, England. After that he was accepted to the extremely competitive University of Nottingham where he studied computer science and management. He graduated from there in 2003. From his educational history is it clear that Adoboli is a very capable individual.
According to the Wall Street Journal:
Adoboli started at UBS in London as a trainee in March 2006, according to the Telegraph newspaper. On the LinkedIn profile, his title is listed as “Director ETF and Delta1 Trading at UBS Investment Bank.”The Slate Article describes how traders are supposed to deal with risk.
Investment banks’ Delta One operations trade securities that attempt to track an asset closely. Our Journal colleague Paul Sonne reported Adoboli has worked since 2006 in the European equities division of UBS, focusing on exchange-trading funds, or baskets of securities that aim to track a specific stock index or commodities.
Every trader is allowed to take on a certain amount of risk, and if he wants to exceed that value he must get the permission of his supervisors. ("Risk" refers not to the amount of money invested but rather the amount one might expect to lose on a particular gamble given the best available estimate of the odds.) Traders are said to have gone rogue when they've either made investments that are too risky, or invested much more money than they're supposed to.What did Adoboli do that went so wrong? It looks like he made some losing trades, then attempted to take riskier trades or larger trades that would cover his losses if he succeeded, but they also failed. Somehow UBS risk management system failed to identify the risks and their size, either because Adoboli concealed them or because the risk management system was inadequate. Here's more from Slate.
A starting employee at a bank like UBS might be allowed to take on risk measuring in the thousands, not millions, of dollars. As a trader gains experience—and demonstrates an ability to make a profit—his authorized risk would increase; a very senior person at a bank might even be permitted a billion dollars' worth of exposure. Nobody has reported just how much Adoboli had been trusted with, but the Wall Street Journal did report that he worked for an equities desk called Delta One that conducted relatively safe trades. Charges against Adoboli allege that he falsified accounting records going back to October 2008. That suggests he was hiding unauthorized losing investments for a long time, as opposed to making one gigantic, really bad bet.It has been reported that UBS' internal controls did not recognize that Adoboli was conducting unauthorized trades. He handed himself into UBS and told them what he had done, and only then did they realize that UBS had lost approximately $2 billion on his trades.
Two earlier rogue traders were Nick Leeson and Jérôme Kerviel. These were traders who were conducting large numbers of trades, made losing trades and learned how to conceal those losing trades from their supervisors while they took increasing risks attempting to achieve an overall winning situation. Nick Leeson's trades bankrupted and destroyed the Barings Bank. Jérôme Kerviel was similar to Adoboli in that Kerveil was a junior trader in the Delta One financial products department of the French bank, Société Générale. Kerviel lost approximately €4.9 billion for the bank through his trading actions.
Kerviel has always claimed that his supervisors were aware of his trades and that he simply became the fall guy when the trades failed. Did the risk management systems really fail in all three of these cases? How much did managers really know about the trades before they were exposed?
The massive power of these big banks to damage the lives and livelihoods of billions of people has be been clear since they initiated the Great Depression, and again has been exposed by their disastrous actions which caused the mortgage fraud that led to the financial collapse of Wall Street in 2008. The unrestrained management of these massive institutions cannot be trusted. This is the message that the Wall Street protesters are highlighting this weekend.
This story begins with one more banking "rogue trader", but it highlights the real problem of rogue financial institutions themselves.
Addendum 9/20/11 @ 1:43 AM CDT
Here is One view on why Bank Reform has not stopped rogue traders.